Yes, the bubble was in real estate. "People believe the value of X will rise indefinitely" is pretty much the definition of "there's a bubble in X". A lot of du

Yes, the bubble was in real estate. "People believe the value of X will rise indefinitely" is pretty much the definition of "there's a bubble in X". A lot of dumb things, not just selling exotic derivatives, were done based on the assumption that house prices could not fall. For example, people used crazy leverage to buy houses, figuring its value had to go up. Now they are underwater on their zero-down adjustable mortgages.